Correlation Between Energy Vault and Brookfield Renewable
Can any of the company-specific risk be diversified away by investing in both Energy Vault and Brookfield Renewable at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Energy Vault and Brookfield Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Vault Holdings and Brookfield Renewable Corp, you can compare the effects of market volatilities on Energy Vault and Brookfield Renewable and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Energy Vault with a short position of Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Vault and Brookfield Renewable.
Diversification Opportunities for Energy Vault and Brookfield Renewable
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Energy and Brookfield is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Energy Vault Holdings and Brookfield Renewable Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable Corp and Energy Vault is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Energy Vault Holdings are associated (or correlated) with Brookfield Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Renewable Corp has no effect on the direction of Energy Vault i.e., Energy Vault and Brookfield Renewable go up and down completely randomly.
Pair Corralation between Energy Vault and Brookfield Renewable
Given the investment horizon of 90 days Energy Vault Holdings is expected to under-perform the Brookfield Renewable. In addition to that, Energy Vault is 3.84 times more volatile than Brookfield Renewable Corp. It trades about -0.04 of its total potential returns per unit of risk. Brookfield Renewable Corp is currently generating about -0.02 per unit of volatility. If you would invest 3,150 in Brookfield Renewable Corp on September 6, 2024 and sell it today you would lose (60.00) from holding Brookfield Renewable Corp or give up 1.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Energy Vault Holdings vs. Brookfield Renewable Corp
Performance |
Timeline |
Energy Vault Holdings |
Brookfield Renewable Corp |
Energy Vault and Brookfield Renewable Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Energy Vault and Brookfield Renewable
The main advantage of trading using opposite Energy Vault and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Vault position performs unexpectedly, Brookfield Renewable can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Brookfield Renewable will offset losses from the drop in Brookfield Renewable's long position.Energy Vault vs. Renew Energy Global | Energy Vault vs. Fluence Energy | Energy Vault vs. Enlight Renewable Energy | Energy Vault vs. Advent Technologies Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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